Employers See Less Health Coverage in the Next Decade

By Vanessa Fuhrmans

The 30% plunge in health insurers’ shares in recent weeks is an index of how seriously Wall Street believes President Obama’s health-reform agenda will ultimately upend private-sector insurance. Now comes a pair of surveys that indicate more of Corporate America anticipates the end of health-care benefits as we know them, too.

According to a survey of 489 large U.S. employers out today, 62% said they were confident they would still be offering their workers health coverage 10 years from now, down from 73% last year. The economic crisis one reason for the drop; the prospect of a new and much different health-insurance system was another.

“This is the first time in the 14 years that we have conducted this survey that employer confidence declined, and it is not related to an increase in cost trends,” said Ted Nussbaum, a director at Watson Wyatt, an employee benefits consulting group, which conducted the survey with the National Business Group on Health.

A employer poll released last week by Hewitt Associates, a rival consultancy, echoes the sentiment. Though the majority of the 340 big employers surveyed had no immediate plans to change their health coverage strategy, one-fifth said their aim is to move away from directly providing health benefits in the next three to five years — up from 4% in 2008 and none in 2007.

Bonus Study: Health-care reform needs to happen “yesterday,” Ivan Seidenberg, chairman and chief executive of Verizon Communications, said in presenting a new Business Roundtable report today on U.S. health-care costs and the competitive disadvantage they create for American workers.

Comments (5 of 26)

Why do overwhelming majority send the children through public system ? Isn't child's education key to success, if so, why trust in Public system for such an essential issue. Those who are ardent supporters that health care should be private with no public counterpart choice, should refuse public school and medicare when eligible. Bet these very same people will be first in line to put their kids and themselves through govt aided systems. Anyone tell me why Public schools work for majority?

11:53 am March 15, 2009

Health Care Provider, Private Practice, NY wrote :

D. Smith - " devolves into a horrific, corrupt, wasteful and inefficient beast" ---
I thought you were talking about the insurance industry. No de-volviong there... they have already arrived.

10:27 am March 15, 2009

HealthCFO wrote :

http://www.cms.hhs.gov/ContractingGeneralInformation/Downloads/02_ICdirectory.pdfMaybe we could narrow this monopsony vs. private carrier debate. I've taken it for granted that everyone on this blog knows that Medicare isn't a single payer, rather, it has a single set of guidelines and it subcontracts with intermediaries to execute the rules that it puts in place. In effect, Medicare outsourced Medicare a long, long time ago. It outsourced it to the very companies that I often read people complaining about. In effect, they're paying these companies a fee to be the medicare intermediary, much like a self-funded employer pays a TPA, et al. Here is the website with the list of intermediaries by State: http://www.cms.hhs.gov/ContractingGeneralInformation/Downloads/02_ICdirectory.pdf .
In the end, regardless of how the healthcare reform debate plays out, Medicare is going to continue to use private companies to administer the Medicare program (or any new program). Aren't we really arguing about the "rules of engagement"? And why would business want to cede the debate over rules of engagment to Medicare? Presumably to get a better deal. But what if a new "Medicare/commercial" mandates minimum coverage levels that small businesses can't afford and, in fact, are moving away from through the use of high deductible type plans? Doesn't business end up with a bigger problem than it has today? At least today, it can continue to raise its deductible/coinsurance to minimize its costs. As long as other employers are doing the same thing, the employers is at no disadvantage in recruiting in the marketplace.
I know there's a lot of passion about single payer vs. privatized. I'm curious what you're all thinking and how you've reconciled what I've said above as you've developed your opinions.

5:58 pm March 14, 2009

H. Green, MD wrote :

D. Smith:
A recent nationwide poll published in the Annals of Internal Medicine revealed that 60% of physicians in America support a single payer interstate health insurance based on Medicare, like HR676. Who understands health care better than physicians?http://www.pnhp.org/docsurvey/annals_physician_support.pdf

5:14 pm March 14, 2009

D.Smith wrote :

Medicare's "2%" overhead rate is significantly understated b/c, among other things, its collections and financial operations are handled by the IRS and other agencies, and off of CMS books (which is on purpose). plus, it actually needs to spend more on overhead, if anything, to fight fraud and waste, which eat up untold billions. anyone who has a clue about what is going on knows how wasteful, inefficient and fraudulent care has gotten because, essentially, no one is asking questions and checking up on self-serving and crooked providers.

single payer, like communism, only works in the minds of ivory tower dreamers, not in real life. it wouldn't take more than a few years before it devolves into a horrific, corrupt, wasteful and inefficient beast, a la Medicaid. God help us if it ever passes.